Posts Tagged ‘thoroughbred racing protective bureau’
Wednesday, July 29th, 2009
By Ray Paulick
Jeffrey and Michael Jelinsky are scheduled to turn themselves in to authorities and report to jail by noon Friday and the U.S. Attorney’s office in Las Vegas has officially closed the case against them after guilty pleas earlier this year in a case involving bookmaking, money laundering and running an illegal gambling operation, much of it out of the Palms Casino and Poker Palace Casino in Las Vegas. The operation involved millions of dollars of illegal bets made on horse racing that, according to the plea agreement, were either booked by the brothers or laid off at the casino racebooks, offshore bookmakers or through the since-closed rebate shop IRG, which was owned by the publicly traded company Youbet.com.
Jeffrey Jelinsky was sentenced to 21 months in prison and Michael Jelinsky 15 months. (Click to see the sentencing forfeitures for Michael Jelinsky and Jeffrey Jelinsky and here for a plea agreement.)
Though the case against the Jelinsky brothers is completed, some questions remain.
Who were the unindicted co-conspirators and customers of this large operation (the U.S. attorney said they lived in Nevada, California, Texas, New Jersey, Colorado, Connecticut and Florida)? Were any of the customers licensed horse owners or trainers? Has racing’s top cop, Frank Fabian, head of the Thoroughbred Racing Protective Bureau, or individual state racing commissions fulfilled their responsibilities and checked with federal prosecutors to see if any licensed participants in horse racing were involved as associates or customers of Jeffrey and Michael Jelinsky?
Fabian did not return a phone call from the Paulick Report inquiring about the Jelinsky matter.
Federal wiretaps were involved in this case, and the feds almost certainly have names and numbers of the players. Incidentally, neither the Palms Hotel and Casino nor the Poker Palace Casino were said to have done anything wrong, according to the documents from the case. (UPDATE: A Paulick Report reader points out in a comment below that Poker Palace was fined $250,000 for failing to properly manage its employees, some of whom permitted an illegal bookmaking operation to lay off some bets and receive prohibited rebates in return for their action. Click here for details on the Nevada Gaming Control Board’s sanctions.)
Why does it matter who may have been betting through an illegal bookmaker?
For starters, money bet with bookmakers on horseracing doesn’t go into the pari-mutuel pools. That means these illegal bets that otherwise might have gone through the mutuel pools are stealing revenue from racetracks and horsemen. Second, knowingly associating with bookmakers is a serious matter that, at least in some states, can disqualify someone from a racing license as owner or trainer. (In California, for example, Rule No. 1902 reads: “No licensee shall engage in any conduct prohibited by this Division nor shall any licensee engage in any conduct which by its nature is detrimental to the best interests of horse racing including, but not limited to: (a) knowing association with any known bookmaker, known tout, or known felon.”
The federal government and the casinos in Las Vegas take this kind of thing seriously. I hope the TRPB and racing commissions do, too.
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Tags: bookie, frank fabian, horse race betting, Horse Racing, illegal bookmaking, illegal gambling, Jeffrey Jelinsky, Michael Jelinsky, money laundering, Palms Casino, Paulick Report, Poker Palace Casino, Ray Paulick, thoroughbred racing protective bureau, u.s. attorney las vegas
Posted in Bookmaking, Criminal activity, Wagering | 13 Comments »
Thursday, May 21st, 2009
By Ray Paulick
For the second time in five days, wagering on a horse race at an American racetrack was allowed to continue until after the contest had been run. The latest incident, which involved Wednesday night’s second race at Penn National in Pennsylvania, came on the heels of a tote system failure at Hollywood Park on Saturday.
The Penn National tote failure was similar to the Hollywood Park problem in that a stop-betting signal was not communicated when the race began. United Tote, which has the contract at the Penn National Gaming racetracks, experienced a system-wide failure, allowing on-track and simulcast wagers to continue during and after the running of the race. The Hollywood Park stop-betting signal from Scientific Games Racing tote equipment was not received by 33 simulcast sites.
John Pricci first wrote about the Penn National problem at Horse Race Insider.
United Tote personnel informed track officials about a communications router failure just as the second race was beginning, Chris McErlean, vice president of racing for Penn National, told the Paulick Report. “The stop betting command which is initiated here did not go out on track or anywhere in the network,” McErlean said. “The pools remained open and were opened well past the finish of the race.”
It was apparent wagers were made after the start of the race, but because United Tote cannot see details on every wager made, track officials were unable to segregate the late bets from those made before the race began, McErlean added. “We discussed with them the various scenarios and the best thing we could do was call the race a no-contest,” he said. “We took the position that the pools had been compromised, and based on the information we had at the time we took the most conservative path and made what we thought was the right decision.”
In Hollywood Park’s past-posting incident on Saturday, all wagers from the 33 sites where the stop-betting signal was not received were thrown out of the pari-mutuel pools and the money refunded to bettors who retained their tickets.
A total of $164,000 was wagered on the race, which McErlean said may have been a little higher than normal but not exceedingly so. All wagers were refunded, though horseplayers were kept in the dark for some time as to why the race was not declared official. Those who had losing bets may have discarded their tickets before the race was declared "no contest."
McErlean admitted that the decision was not communicated as well as it should have been across the wagering network. “I will say in terms of communication there was confusion,” he said. “The race was never made official. From a display point of view, the television monitors may have displayed official without tote prices. That was obviously not.”
The Pennsylania Horse Racing Commission and Thoroughbred Racing Protective Bureau were notified of the problems, McErlean said.
To his knowledge, this was the first time since McErlean joined Penn National Gaming in December 2006 that any of the company’s six tracks have experienced this type of problem. “It appears to be either networking or equipment failure involving a communications router ,” McErlean said. “The issue that has to be discussed and talked about is where is the potential safety valve if one system fails or one part fails. What is the backup or Plan B?”
Good question, and one racing regulators must demand from the tote companies that are jeopardizing the integrity of the wagering systems that are the foundation of this game.
Be sure to vote in today’s Daily Paulick Poll asking whether you have confidence in the security of the U.S. pari-mutuel wagering systems.
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Tags: chris mcerlean, Hollywood Park, Horse Racing, John Pricci, pari-mutuel wagering, past-post betting, Paulick Report, penn national, pennsylvania horse racing commission, Ray Paulick, scientific games racing, thoroughbred racing protective bureau, tote failures, trpb, united tote
Posted in Regulatory Issues, Tote System, Wagering | 24 Comments »
Wednesday, May 6th, 2009
By Ray Paulick
Former jockey Ricardo A. Valdes, one of seven riders banned from Tampa Bay Downs in December 2006, was indicted Wednesday along with two Michigan businessmen on 19 federal counts of conspiracy to commit wire fraud, conspiracy to influence sporting contests by bribery, and unlawful use of a facility in interstate commerce—all in connection with a series of alleged race fixing incidents at Tampa Bay Downs in Florida, Delaware Park in Delaware and Great Lakes Downs in Michigan, from December 2005-December 2006.
The other two men indicted, Ghazi Manni, 52, and Mitchell Edward Karam, 76, were named in a separate federal indictment involving a point-shaving scheme that also resulted in charges against six former University of Toledo basketball and football players.
Click here to read the race-fixing indictment.
Click here to read the point-shaving indictment.
The indictment, handed down by assistant U.S. Attorney David Morris in the U.S. District Court for the Eastern District of Michigan’s Southern Division, said Manni, Karam, Valdes and “others known and unknown to the grand jury, “devised and effectuated a scheme to defraud and for obtaining money by ‘fixing’ Thoroughbred horse racing contests.” The trio is charged with using insider information provided by jockeys to help make wagering selections and then “bribing jockeys participating in these contests to give less than their best effort to win and to handle their horses other than for the purpose of winning.”
The indictment states the 43-year-old Valdes “and other persons known and unknown” accepted money and other things of value to “use less than their best efforts to win a race.” Valdes is also charged with “attempting to recruit other Thoroughbred horse jockeys to join the conspiracy.”
If convicted, the three men face up to 25 years in prison and fines of as much as $500,000.
The indictment cites a series of phone calls and voice messages involving the three men, a pari-mutuel clerk at the Northville Downs harness track in Northville, Mich., and an employee of Huntington Bank in Hamtramck, Mich. Federal authorities apparently had wiretaps on the calls.
Listed are four specific races at Tampa Bay Downs in which Valdes rode in January and April 2006.
– In the 10th race on Jan. 10, 2006, Valdes finished sixth with Urilla, the 3-1 second choice in the wagering, Urilla trailed the field for the opening half mile before passing horses late, according to the Equibase chart.
– In the third race on Jan. 29, 2006, Valdes finished second on Cocoa Beach Rocket, the 4-1 third choice who led briefly in the stretch “but hung late,” according to the chart.
– In the eighth race on Jan. 31, 2006, Valdes finished sixth on Sharenski, the 5-1 third choice who trailed the field for the opening half mile.
– In the third race on April 15, 2006, Valdes ran last aboard Chalk Chalk, a 12-1 longshot who showed early speed on a turf route but bore out on the first turn and faded quickly.
The other jockeys banned by Tampa Bay Downs in December 2006 were Terry Houghton, Joseph Judice, Derek Bell, Jorge Bracho, Luis Castillo and Jose Delgado. Of that group, only Houghton and Bell rode in any of the races cited in the indictment. Bell finished seventh in the Jan. 29 race on Greatest Creation, who showed early speed at 8-1 odds. Houghton finished third Jan. 31 on Camilles Castle, a 6-1 shot who “chased the leaders but failed to respond in the drive,” according to the chart.
Bell told the Thoroughbred Times in January 2007 he was questioned by the Thoroughbred Racing Protective Bureau about the Jan. 29, 2006, race in question but denied any wrongdoing.
None of the other jockeys banned by Tampa Bay was named in the indictment. The Tampa Bay ban on all seven jockeys still stands.
Peter Berube, the Tampa Bay Downs vice president and general manager, declined to comment on the indictment, which provided no specific details about alleged race fixing at Delaware Park or Great Lakes Downs.
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Tags: chalk chalk, cocoa beach rocket, derek bell, ghazi manni, Horse Racing, jorge bracho, jose delgado, joseph judice, luis castillo, mitchell edward karam, northville downs, Paulick Report, peter berube, point shaving, race fixing, Ray Paulick, ricardo a. valdes, sharenski, tampa bay downs, terry houghton, thoroughbred racing protective bureau, trpb, university of toledo, urilla
Posted in Jockeys | 19 Comments »
Monday, October 13th, 2008
By Ray Paulick
Under normal circumstances, handle on the 2008 Breeders’ Cup World Championships would blow past all previous betting records. But the economic crisis gripping the United States and many other countries is anything but normal.
This year’s World Championships take place over two days at Santa Anita Park Oct. 24-25 and includes 14 Breeders’ Cup races, up from the 11 held at Monmouth Park in 2007 when the event was first expanded to two days. Last year’s two-day handle was a Breeders’ Cup record $147 million ($31.5 million on the Friday card and $115.7 million on Saturday), but the total was below expectations by at least 10% because of the extremely wet weather conditions. The previous all-sources wagering record was set in 2006 when $140.3 million was wagered on eight Breeders’ Cup races on a single day at Churchill Downs.
Ken Kirchner, the president of FalKirk International and the longtime wagering consultant to the Breeders’ Cup, wouldn’t make any predictions about this year’s handle. “It’s hard to say where the economy is going to be in 10 days,” Kirchner told the Paulick Report. “Everybody has been down between 10% and 20% in wagering all summer and fall. Things can change quickly, but certainly the trend isn’t good.”
Kirchner hopes some fans have been stockpiling a bankroll for the big event. “It’s not a positive situation,” he said, “but we’re going to have very strong and full fields and some people may just be waiting for this as opposed to betting the run-of-the-mill races.”
Holding the Breeders’ Cup’s traditional dirt races on a synthetic surface doesn’t bother Kirchner. “The new (Pro-Ride) track seems to be playing fair,” he said. “If the horses show up, the bettors will follow.
Kirchner did say scheduling the Breeders’ Cup on the last weekend of the month is a disadvantage because of consumer spending habits. “Having it at the beginning of the month (when Social Security and other fixed income checks arrive) makes it 3% to 5% stronger,” he said.
The Breeders’ Cup had the first $100-million wagering day in North American racing history Nov. 6, 1999, at Gulfstream Park. That was the year the Filly & Mare Turf was added, making it an eight-race championship.
By comparison, Kentucky Derby day betting topped $100 million for the first time in 2000, and it’s grown significantly since. Churchill Downs now holds the North American record of $175 million established on the 2006 Kentucky Derby program. Add wagering from Friday’s Kentucky Oaks program ($33 million in 2006), and the total tops $208 million.
It’s clear the Breeders’ Cup braintrust is trying to emulate the success of the Friday Oaks/Saturday Derby format at Churchill Downs by bundling all of the filly and mare races on this year’s Friday program (and by requiring fans to purchase seats for both days as Churchill Downs has done with the Oaks and Derby). The Breeders’ Cup doesn’t have the cachet of the Kentucky Derby (or the Oaks for that matter), though that doesn’t mean the new format will not work.
With the additional Breeders’ Cup races, better weather and a more traditional big race venue (Santa Anita vs. Monmouth Park), handle will increase this year. My prediction is for $175 million in wagers over the two championship days. Without all the economic uncertainty, $200 million would seem realistic.
SPEAKING OF BETTING, REMEMBER THAT JUNE 28 RACE AT PHILADELPHIA PARK when wagers were allowed at some Florida simulcast sites after the race had been run? The Thoroughbred Racing Protective Bureau issued a report and sent it to the tracks involved – Philadelphia Park and Tampa Bay Downs – but according to Peter Berube, Tampa Bay’s vice president and general manager, he still doesn’t understand exactly how the Philly Park past-post bets occurred.
“I have the report,” Berube told the Paulick Report last week. “It’s highly technical but draws no conclusions and places no blame on anybody. Apparently it was a sequence of events that took place between the tote companies.”
Scientific Games (formerly Autotote), which handles wagers for Philadelphia Park, was experiencing technical problems with its system that day at races from Philly and Delaware Park. Tampa Bay Downs and 11 other North Florida wagering sites (dog tracks and jai-alai frontons) use AmTote. A communications breakdown between the systems failed to send a stop-bet signal to AmTote.
Joe Wilson, chief operating officer of Philadelphia Park, did not return phone calls seeking a comment.
According to Berube, the past-post wagering was limited to his track, with most of the past-post bets placed by one customer, who is known as a big bettor at Tampa Bay. “What’s in the report would lead me to believe that there was no abnormal spike in bets overall,” Berube said. “We were the 14th ranked site in terms of total bets (on the fourth race, the race in question), but first in cashes. We were the only site that had a negative settlement (with more winnings that money wagered).”
Berube said he interviewed the horseplayer who allegedly made the past-post wagers but allowed him to collect on his winning bets. “We brought people in and spoke with them but after Philadelphia Park priced the race I couldn’t tell them to give us the money back.
“I’ve been here 15 years and have never experienced anything like this before,” said Berube, whose father, Paul Berube, is the former head of the TRPB.
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Tags: amtote, Breeders' Cup, breeders' cup wagering, falkirk international, joe wilson, ken kirchner, kentucky derby, kentucky oaks, pari-mutuel wagering, past-post betting, past-post wagering, peter berube, Philadelphia park, santa anita park, scientific games, tampa bay downs, thoroughbred racing protective bureau
Posted in Breeders' Cup, Horse Racing, Synthetic surfaces, Wagering | 1 Comment »
Monday, October 6th, 2008
Ray Paulick is live blogging the Task Force on the Future of Horse Racing’s subcommittee on integrity of racing and pari-mutuel activities from the offices of the Kentucky Horse Racing Commission Monday afternoon, beginning at 1 p.m.
Edward (Ned) Bonnie, a member of the racing commission, is chairing the meeting, which is called to order at 1 p.m. "Hopefully we are going to be able to move this peanut down the sidewalk and take some action, however modest, by the end of this meeting."
1:05 p.m. … Hold your horses, Ned! There are six members of the subcommittee and four are needed for a quorum to take any action, acccording to racing commission executive director LIsa Underwood. Unfortunately, there are only three "voting members" of the task force on hand at the beginning of the meeting. Does that say anything about the task force’s commitment to integrity? Hmmmmmmm.
1:10 p.m. …Sounds like Ned Bonnie may be filibustering till someone else shows up to give this group a quorum. Bonnie is talking about various white papers he has written on integrity issues in Kentucky. Earth to Ned: No one with authority has acted on those white papers. Try a different color.
Bonnie states that Keeneland employs the Thoroughbred Racing Protective Bureau (TRPB), the so-called “security arm” of the Thoroughbred Racing Associations of North America (not to be confused with the National Thoroughbred Racing Association). However, it is revealed Turfway Park, which is owned in part by Keeneland, does not use the TRPB. Is no one on this task force subcommittee curious why Keeneland doesn’t use TRPB at Turfway?
Bonnie says Kentucky’s racing regulators have been understaffed for many years in the area of security. “Feet on the ground is the most effective way to produce security on the backside,” he says. Bonnie says New York has 12 investigators. When vets show up at the back gate at a New York track, Bonnie says, the security chief for the New York State Racing and Wagering Board assigns an investigator to ride with them. New York’s security arm recommends that each state have a good security staff, well paid, but that the industry also needs a group, not unlike the Big Event Team that provides stable area security at major events. “If we are going to have the integrity the industry accepts the need for, then we are going to have to have the tools to get that done," Bonnie says.
1:20 p.m. … First up is Isidore Sobkowski, an entrepreneur who said he has developed a system for wagering security in conjunction with the Association of Racing Commissioners International Integrity Services. Sobkowski said he used to nail insider traders on Wall Street and was an interim consultant to the NTRA on wagering integrity back when the organization hoped to have an Office of Wagering Security. Sobkowski told Bonnie he spent two years trying to sell his pari-mutuel security system to the NTRA, but it “became clear” they weren’t going to buy it. As of Jan. 1, 2009, Sobkowski said, totes will be subject to a rule in New York State for “independent monitoring.” He said California, Oregon and other states will follow suit. Totes may be able to pass on costs TO THE CUSTOMER (see 2:15 p.m. update), Sobkowski added.
Izzy (easier to type than his full name) has some proprietary software called MonitorPlus that he said detects “potentially inappropriate activity in the transactional stream and security database.”
1:25 p.m. … Bad guys who want to break into the tote systems are getting smarter, Izzy says. Reminds me of "when guns are outlawed only outlaws will have guns." He is offering a "turn-key solution. " Izzy says, "Plug it in, it works, take the plug out, it stops working."
1:30 p.m. … Still no quorum for this meeting.
1:35 p.m. … Sobkowski and RCI president Ed Martin came up with the idea of RCI Integrity Services at a diner outside of Saratoga. Now he is filibustering, talking about "artificial intelligence" and all the people who were too stupid to buy his services until now.
1:40 p.m. ,,, Denny Oelschluger (an associate of Izzy’s … can’t they hire someone with an easy name to type?) talks about some of the actual results the MonitorPlus system has detected. Examples: an advance deposit wagering account with computer assisted wagearing that has a rate of return of 1.5 on all bets (the normal is less than 0.80); in looking at 862 races (5,800 wagering pools, over six days), Monitor Plus detected multiple instances of cancel delays (bets canceled after the close of wagering). The canceled bets are losers, suggesting a similar pattern to past post wagering on winning bets; win pool odds are being manipulated by canceled transactions. The system also picks up suspicious wagering on "fixed" or "boat" races, Denny says.
1:50 p.m. … "How do we stop this?" Bonnie asks. I believe that’s why we are here, sir. I assume he is talking about the illegal wagering, but maybe he is talking about the presentation of MonitorPlus (see below).
2:00 p.m. … "We are not going to serve dinner here tonight," Bonnie says. In other words, isn’t 45 minutes enough time to deal with this issue of integrity? Please sir, just a little more time, Izzy begs after that remark. To her credit, Lisa Underwood steps in to say that it would be a good idea if the system could be explained further for the members of the task force subcommittee.
2:05 p.m. … It just occurred to me that this MonitorPlus system does not have the stamp of approval of the Jockey Club (no Jockey Club officials are at the meeting), which in my opinion is going to severely impact its chances of approval. Those Jockey Club tentacles have a long reach.
2:08 p.m. … Izzy does a quick "how the system works" presentation. It includes a national database that analyzes wagers everywhere. Bonnie questions whether a national data base has jurisdiction on account wagering systems based off-shore in places like St. Kitts (where many of the rebate shops are located). Izzy says on Oct. 18 those off-shores are going to be "read the riot act" in a meeting in Oregon. Not sure why. Again, it looks like this could meander down the path of "lack of national authority." Izzy says national legislation would help but then adds that the industry doesn’t seem to want that.
2:10 p.m. … "Clustering" is explained by Izzy as unusual things that happen in a betting stream. Once clusters are found, they are analyzed with such things as a SNA or social network analysis that looks at who is involved (jockeys, trainers, owners), what is their record, who are their associates …a who, what, when, and maybe a why the unusual cluster of betting activity occurred.
2:15 p.m. … Customers will be paid by the month; fees will be assessed by how much the MonitorPlus system is used, and its price is based on the handle. Mike Maloney, the horseplayer on the task force, asks how costs are passed on to customers. Industrywide it would cost $6 million, Izzy says, with the increase to be added to takeout (approximately .0004% of handle, based on $15 billion in national handle). Maloney says takeout is too high already, but that the small additional amount doesn’t bother him. A lot cheaper than the $50 million IBM wanted to charge a few years ago, Izzy says.
2:25 p.m. … Frank Kling, a member of the Kentucky Horse Racing Authority talks about the work his committee had done regarding problems related to the tote system before Kentucky Gov. Steve Beshear disbanded the authority and replaced it with the racing commission and mostly filled it with people who helped get him elected. Sounds like any good work that committee may have done will soon be forgotten.
2:35 p.m. … Horseplayer Mike ($10 million in bets a year) Maloney takes the floor. "I’ll rely on my 30 years of hard knocks at the racetrack to help expalin this." Maloney refers to a white paper he wrote for the commission and says a year ago no one was talking about wagering integrity. "We’re at the very beginning of this process," Maloney says. "This is an opportunity for Kentucky to take the lead. No one has really stepped forward." Maloney believes that increased wagering security will lead to greater confidence among bettors, who may bet more in the future. "Our wagering system is flawed," he says. "I hope everyone on this task force agrees with that. … Any reasonable person would have to agree with that." Maloney sees problems with past posting (accidental, part of a sophisticated plan, larceny, incompetence, human error). There are delayed cancellations. "When they are used to take advantage at the racetrack, it’s basically stealing," he says. "Since we don’t have a national authority, every bettor, every participant depends on the state racing commission to protect their interests. Today we fall far short of that mark, and it’s in the hands of the racing commission. The racing commission is the protector of the bettor’s rights."
"Tracks don’t record (in minutes and seconds) when their races begin," Maloney says. "Betting sites are allowed to participate in our wagering pools without proper oversight. In order to protect all bettors’ rights, no one should be allowed to participate in any Kentucky racing pool unless they agree to a certain level of oversight."
2:45 p.m. … Maloney is stunned that no American track (until recently) records the actual start time of a race, in order to compare it to when the betting is cut off, then says an average group of eighth graders would make that as a requirement if they were to set basic rules for racing. Tote companies do record when the betting stops, Maloney said. Kling said that Nick Nicholson of Keeneland added the start time to television monitors for Keeneland’s races. The times between tote companies and racetracks are not currently synchronized. "Lacking a national body of oversight I don’t know where we start on this," Maloney says. "How hard is it to do that?" Maloney asks. "You’d think we could do that with a conference call in an hour. We’re not asking to reinvent the wheel or split the atom."
2:50 (at least according to my clock) p.m. … Maloney is still stuck on time. He relates how Sunday at Keeneland a clock on Keeneland’s monitor showing the time in hours/minutes/seconds and a monitor with a Belmont Park race showing hours/minutes/seconds each had a different time of day. He relates to how the Nevada Gaming Control Board closely monitors the game of Keno and how that regulatory agency would crack down on the kinds of problems that horse racing has. "In racing we know we have these problems," he said, "we just let it go on. Nobody pays a fine, nobody loses their license. Who takes the brunt of that? The bettor. And the game of racing. The industry is hurting itself by not policing itself."
2:58 p.m. … Maloney still going after them, saying that past-posting incidents only come up when they are discovered by the press. The tracks and the tote companies won’t admit it until they have to, he says. It’s up to the commissions he repeats. His solutions: 1) "invest in technology to make the longest wagering cycle no more than 15 seconds" (he refers to a five-year old study done in the wake of the 2002 Pick Six scandal at the Breeders’ Cup that called for the 15-second cycle, and said it hasn’t been done yet); 2) "use technology to directly link the pressing of the starter’s button to the closing of the wagering system" (currently stewards push a button to close betting); 3) "require tracks to record when their races start. I would like to see that be in the regulations"; 4) "require all tracks and tote companies to synch their time systems to one industry standard." Maloney said he is "so encouraged" after years of banging his head against the wall on these issues.
3:05 p.m. … Bonnie looks a bit deflated when he says the subcommittee can’t take action on anything today for lack of a quorum.
3:10 p,m. … Bonnie asks Maloney why something hasn’t been done yet. "The industry lacks oversight," Maloney tells him. Duh.
3:13 p.m. … Owner/breeder Gary Biszantz, a member of the subcommittee speaks up. "I’m not sure why I’m here today," he says, then goes on to tell the story of how he told officials at the New York Racing Association five years ago that there was past posting going on and they said he was crazy. Biszantz pushes for a non-technological solultion. Close the pools at post time, before the horses are loaded into the gate, he says. "As a bettor, I’d have absolutely no problem with that," Maloney said. "But the tracks wouldn’t go for that," Biszantz answers back, then goes on about all the problems the industry faces because of the lack of oversight at nearly every level. "It’s total chaos," Biszantz emphasizes.
3:18 p.m. … Bonnie calls for a break. Maybe he can round up another committee member and get a quorum.
3:30 p.m. … Frank Fabian and Curtis Linnell from TRPB are introduced. Fabian, a former G-man who worked in the terrorism division of the FBI, is a smooth talker. He applauded the TRPB’s own wagering analysis program that the TRA funded to the tune of $600,000 and eventually fell into the lap of the Jockey Club. "For two years now, we have been doing quite a bit," he told Maloney. "We’ve been quite successful," Fabian said, adding the TRPB has the full support of all the Kentucky racetracks. Fabian said wagering anomalies have been identified and "reports have been filed" with the racetracks where those anomalies occurred. Maloney doesn’t look very convinced, and I am reminded of the reaction of one industry leader to Fabian’s similar presentation at a Jockey Club Round Table a couple of years ago in Saratoga Springs, N.Y. "That was total b.s." this person said to me after Fabian’s Round Table presentation.
"I think TRPB is doing all it can to bring the engagement of wagering integrity in the environment we are in now," Fabian told the commission subcommittee. Fabian said the TRPB has analyzed off-shore wagering activities and is putting these betting shops through a due diligence process, but would not comment when questioned on whether or not anything found in that analysis was "alarming." Malone presses Fabian on whether or not RGS (a major rebate shop) has agreed to a due diligence process. Fabian employs an artful dodge, then introduces Linnell.
3:45 p,m. … Linnell gives a history lesson about how the NTRA blew through $3 million after the Pick Six scandal of 2002 without solving the wagering problems it was charged to examine.
3:50 p.m. … Linnell focuses his report on "stop betting," showing the varous ways and times betting can be stopped. As a representatiive of the racetracks (it should be remembered), he reminds the commission that betting should be left open as long as possible. A nifty bar graph on the close of betting shows that 23% of the entire win pool of a race is wagered between the "off time" when a race is scheduled to go and the final close. Linnell calls it "counterproductive" to close wagering pools early because "betting device technology is improving."
4:00 p.m. … During a Q&A session on some of Linnell’s presentation, Biszantz complains that we are listening too much to the tote companies instead of doing the right thing. Malone shakes his head in agreement. Linnell returns to his presentation and focuses on factors that slow down the posting of final odds (which infuriate horse players who see the odds change midway through a race). One factor is the cancel-delay — the time that bets can be cancelled after betting has closed. Cancel delays are sometimes allowed for pari-mutuel clerks to make. Double hops from betting hub to betting hub can also slow odds, Linnell said, as can tracks who are not on-board an "almost final" tote update. (It’s all too complicated, which is probably the point of his presentation.)
4:05 p.m. The TRPB is investigating past-post incidents, Linnell said, using its wagering analysis tools. Those investigations are launched as a result of multiple points of contact, whether from tracks, commissions, major horseplayers and even England’s BetFair betting exchange, which takes bets on U.S. races. Linnell then explained several reasons for how past-post betting can occur, including human error or technology and hardware or software failure. Linnell is losing me again, talking about master systems, slave systems, and clones. It must mean something to someone.
The committee then discusses mistakes by tote companies that allow past posting and how they should be penalized in some way if the tote companies make a mistake similar to the kind that occurred several months ago when past-post wagering took place at Tampa Bay Downs on a race at Philadelphia Park that had already been run. "Every bet made was a winning bet!" Linnell joked.
4:20 p.m. … Linnell gave his solutions to the problems of the stop-betting issue: conduct daily testing of stop betting system; have a back-up to the stewards/judges function that currently stops betting; have a second stop-betting command; get rid of all cancel delays; and have tote time recorded on the video feed from every track.
4:25 p.m. … Maloney wants more accountability and transparency regarding the public disclosure of past-posting incidents and their causes. "I see this as a big problem with the confidence of bettors," he said. Linnell didn’t disagree, laying out a series of actions that TRPB recommends in the event of past-posting incidents, including more disclosure and transparency on the incidents, and the extent of wagering that took place after a race began.
4:35 p.m. … Linnell wraps up his presentation, and I’m afraid that Bonnie didn’t live up to his promise to move the peanut up the sidewalk. No quorum, no peanuts, and no sidewalks are in sight.
4:50 p.m. … Bonnie asks Fabian how Kentucky can improve its backstretch integrity related to the use of performance enhancing drugs in horses. "It’s through (on-track) investigators that helps us focus (TRPB’s) scant resources to work with commissions to have targeted investigations and targeted searches," Fabian said "We have to get back to some of the basics for our investigatve techniques. We have fallen short on having quality investigators."
5:00 p.m. … After a meandering discussing about the need for backstretch security to deal with catching cheaters who use performance enhancing drugs, Bonnie closes the meeting. "When we have a quorum we’ll take some action," he says.
Let’s hope someone holds the commission to that.
Copyright © 2008, The Paulick Report
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Tags: association of racing commissioners international, bob beck, ed martin, edward bonnie, frank kling, gary biszantz, Horse Racing, isidore sobkowski, Keeneland, kentucky horse racing commission, lisa underwood, mike maloney, National Thoroughbred Racing Association, ned bonnie, nick nicholson, pari-mutuel wagering, past-post betting, Paulick Report, pick six scandal, Ray Paulick, RCI, subcommittee on integrity of racing and pari-mutuel act, task force on future of horse racing, thoroughbred racing associations, thoroughbred racing protective bureau
Posted in Kentucky, Regulatory Issues | 11 Comments »
Monday, July 7th, 2008
The fourth race at Philadelphia Park June 28 was just a run-of-the-mill claiming contest until the Scientific Games totalizator system malfunctioned shortly after Magical American crossed the finish line as the winner. The top three finishers (4-2-3) were put on the board, but the problems with the tote delayed Philadelphia Park from making the race official and posting the payoffs. The fifth race at the Pennsylvania track was run without betting.
A little over a thousand miles away at Tampa Bay Downs on Florida’s Gulf Coast, some horseplayers became curious about what impact the tote failure had on the AmTote wagering machines there.
Lo and behold, they discovered wagers made on the winning horses in Philadelphia Park’s fourth race were still being accepted. The Paulick Report has learned that players started punching out win tickets, exactas and trifectas. The delay, from the time the Philadelphia Park race was run until someone in the Tampa Bay mutuels department realized there was a problem, was about 10 minutes, at which time betting was halted. It was nearly 15 minutes from the time the race was run until the Florida track received a stop betting order from Scientific Games (formerly Autotote).
In the meantime, a considerable amount of money was bet on what can only be described as a horseplayer’s dream: a “sure thing.” It was free money.
One player bet $1,000 on his own: $500 to win and a $500 exacta. He got a tidy return of $8,100 when the system was up and running later that afternoon. In all, Tampa Bay took in $2,000 in wagers on the race and paid out more than $13,000 to the lucky (if somewhat dishonest) fans.
The past-post wagers went into the betting pools at Philadelphia Park, shortening payoffs for those who picked the winning combinations honestly. Though the size of the pools for the race were not unusually large, it appears the winner’s odds were driven down by the past-post bets.
One bet that would not be affected was the daily double on races three and four, which paid $32.40 after a 7-10 odds-on favorite won the third race. (Bets on the daily double would have been made prior to the third race.) That payoff suggests Magical American should have gone off at odds of about 8-1. But when the payoffs were posted, Magical American paid only $9.20 on a $2 win bet.
“We are aware of the situation,” Curtis Linnell, director of wagering analysis for the Thoroughbred Racing Protective Bureau, told the Paulick Report. “It looks like it may have been isolated to Tampa. It didn’t look like it was widespread.”
Linnell said he could not comment further because the circumstances are under review.
The stop betting signal is part of the standard protocol established for pari-mutuel wagering, according to Linnell. The signal goes from the host track to other hubs or tote systems handling wagers going into the host track pool. He said a “break” in the communications signals could prevent the stop betting signal from going out.
“That situation can happen, and in very isolated situations it has,” Linnell said.
Joe Wilson, the chief operating officer of Philadelphia Park, did not return phone calls to the Paulick Report seeking comment. A spokesperson for the Pennsylvania Horse Racing Commission said the matter is being investigated.
This issue begs the question of who is minding the tote, a patchwork, less-than-state-of-the-art wagering network that handles the approximate $15-billion in bets each year and flows through racetracks, hubs, guest hubs, off-track betting sites, account wagering systems, and off-shore rebate shops?
State racing commissions look into these matters, but in this case the wagers were made across state lines. The TRPB has an investigative branch, but it is more concerned with tracking wagering patterns that could suggest race-fixing by racing participants. The National Thoroughbred Racing Association did have its focus on wagering integrity, particularly after the Breeders’ Cup Pick Six scandal of 2002. Plans were announced by the NTRA to staff an Office of Wagering Integrity, but those plans went by the wayside when the industry could not reach a consensus on what to do.
Alex Waldrop, the current head of the NTRA, said during a recent Congressional hearing that racing is not a rudderless ship. But there doesn’t appear to be anyone with his hands on the wheel of the most important boat in the racing industry’s fleet – the tote system.
By Ray Paulick
Copyright ©2008, The Paulick Report
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Tags: alex waldrop, amtote, curtis linnell, National Thoroughbred Racing Association, Paulick Report, pennsylvania horse racing commission, Philadelphia park, Ray Paulick, scientific games, tampa bay downs, thoroughbred racing protective bureau, totalizator, Tote System, trpb
Posted in Regulatory Issues, Tote System, Wagering | 8 Comments »
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